BY GEROME DALIPE IV
ILOILO City – The overall inflation rate in Western Visayas has slowed to 2.0 percent in January 2024, the Philippine Statistics Authority (PSA) reported yesterday.
In the press conference, Nelida Amolar, PSA Regional Statistics Services 6 officer-in-charge, said the statistics showed the lowest inflation rate since the 1.3 percent inflation rate recorded in November 2019.
The inflation rate was recorded at 3.2 percent in December 2023, while it was 10.3 percent in January 2023. The inflation rate in January 2023 was higher at 10.3 percent.
Amolar said the downtrend in the region’s overall inflation in January 2024 was mainly attributed to the slower annual growth in the index of food and non-alcoholic beverages with a 4.2 percent inflation rate in January 2024 from 7.0 percent in December 2023.
PSA also identified the top three commodities contributing to the January 2024 overall inflation. The first factor is food and non-alcoholic beverages with 91.1 percent share, or 1.3 percentage points.
The second factor is restaurant and accommodation services with a 20 percent share or 0.40 percentage points. Alcoholic beverages and tobacco ranked third with 11.9 percent shares, or 0.2 percentage points.
Inflation refers to the rate at which the general level of prices for goods and services is rising, leading to a decrease in purchasing power. Hence, a high inflation rate means that prices are rising rapidly.
So, does low inflation mean a lower poverty rate?
The answer is in the negative, said Amolar, stressing the agency uses different references in determining the relationship between inflation and poverty. It would also depend on various factors such as level of income, employment opportunities, and social safety nets.
While low inflation may help people increase their income and save, its impact on poverty is indirect and depends on several factors.
For instance, low inflation might lead to lower cost-of-living increases for people on fixed incomes, which could help alleviate poverty for some individuals.
A low inflation rate is often considered beneficial for the economy as it provides a predictable environment for consumers and businesses to plan their spending and investment preferences.
But does low inflation mean a lower poverty rate?
The answer is in the negative, said Amolar, stressing they are using different references in establishing that the relationship between inflation and poverty would depend on various factors such as level of income, employment opportunities, and social safety nets.
While low inflation may help people increase their income and save, its impact on poverty is indirect and depends on several factors.
However, low inflation can also be a sign of economic stagnation, which can lead to job losses and reduced economic opportunities, potentially increasing poverty rates. Hence, government policies play significant roles in determining the poverty rate.
The PSA-6 reported about 414,000 families, or 20.5 percent of all families in Western Visayas, live below the poverty threshold.
The above poverty rate statistics in the region represented the first semester of 2023. The monthly poverty threshold for a family of five is P14,206, while the food threshold is P10,005, the agency reported.
A poverty threshold is the minimum level of income deemed adequate in a particular region to meet the basic needs of life. It is typically adjusted for inflation to ensure that it accurately reflects the cost of living.
Theoretically, a high inflation rate can contribute to an increase in poverty if incomes do not rise at a similar rate or if the poverty threshold is not adjusted to match the increased cost of living.
Likewise, the PSA-6 reported that food inflation in the region slowed down to 4.3 percent in January 2024 from 7.3 percent in the preceding month. Food inflation in January 2022 was recorded at 11 percent.
At the national level, the PSA also reported that food inflation eased to 3.3 percent in January 2024 from 5.5 percent in the previous month. In January 2023, food inflation was higher at 11.2 percent.
The agency noted the deceleration of food inflation in January 2024 was primarily brought about by the faster year-on-year decline in the index of vegetables, tubers, plantains, cooking bananas, and pulses at 20.8 percent during the month from 9.2 percent annual decrease in December 2023.
Fish and other seafood also contributed to the downtrend with a slower inflation rate of 1.2 percent in January 2024 from 4.8 percent in December 2023. In addition, food inflation shared 43.3 percent or 1.2 percentage points to the overall inflation in January 2024.
The food groups with the highest contribution to the food inflation during the month were cereals and cereal products such as corn, flour, bread and other bakery products, pasta products, and other cereals, with an 11.6 percent share or 3.7 percentage points.
Milk and other dairy products and eggs also contributed to the overall food inflation with a 9.0 percent share or 0.3 percentage points, while fruits and nuts with 8.3 percent share or 0.3 percentage points.
On the other hand, PSA reported that core inflation at the national level, which excludes selected food and energy items, decelerated to 3.8 percent in January 2024 from 4.4 percent in the previous month. In January 2023, core inflation was higher at 7.4 percent./PN
